KUALA LUMPUR, June 1 Malaysia's RHB Bank Bhd
and AMMB Holdings Bhd (AmBank) said on
Thursday they will begin merger talks, in what could be
Malaysia's biggest banking deal.
The banks have received the nod from the Malaysian central
bank to commence merger negotiations, they said in a joint
statement, adding that the approval is valid until Nov. 30.
"Both parties have entered into an exclusivity agreement to
negotiate and finalise terms and conditions of the proposed
merger for submission to the relevant regulatory authorities,"
the statement said.
The transaction is expected to be an all-shares merger, they
The potential merger would reinforce RHB's ranking as the
fourth largest Malaysian bank by assets behind Maybank
, CIMB Group Holdings and Public Bank
. AmBank is currently the country's sixth biggest bank.
Source told Reuters on Wednesday that RHB would be the
acquirer in the potential merger.
AmBank has a market capitalisation of 15.7 billion ringgit
($3.66 billion) and a full takeover at those price levels by RHB
could make it the biggest deal in the Malaysian banking
industry, according to Thomson Reuters data.
Trading in shares of RHB and AmBank were suspended ahead of
The last big banking merger was the 2006 acquisition of
Southern Bank for $1.74 billion by Bumiputra-Commerce Holdings,
which eventually became the current CIMB Group after a series of
mergers and a rebranding exercise.
($1 = 4.2860 ringgit)
(Reporting by A. Ananthalakshmi; Editing by Muralikumar